What is a utility bill?

Utility bills are a regular occurrence in most people’s lives – and can add up to hundreds of dollars a month in expenses! Generally, you’ll get utility bills for things like electricity, gas, and water (typically each month) to your home or business. We’ll break down what utility bills you’re likely receiving, what makes up the final utility bill you see at the end of each billing cycle, and ways to save on your utility bills in the future.

A utility bill is a monthly invoice sent to you by a utility company for services provided to your home or business. Most often, there will be a single provider for each service in a city or town that you must work with to provide electricity, heat, and running water in your home. Utility bills vary from place to place, but we’ve compiled the basic facts you need to know to understand what you are looking at when you receive your utility bill.

Whether you receive it via mail or email, a utility bill will include the primary customer’s name, account number, and address where the utilities are being provided. It will also include what you used over the past billing period – for example, how much electricity you used in your home or apartment last month. Many utility bills will show how your utilization has changed over the past few months and allow you to compare how much you spend on that utility from month to month.

A utility bill cost covers more than just the utility itself. (For example, your water bill isn’t just the amount of water you used last month.) Wrapped up in the final amount are delivery charges, or the cost to the utility company of getting the service they are providing (gas, water, electricity, etc) into your home.

Electricity bill

Your electricity bill is the monthly cost of delivering electricity to your home and the production of that electricity. That bill includes a supply charge and a transmission and distribution charge. Electricity costs can vary greatly depending on where you live and your electricity usage. If you’re interested in learning more about how you pay for electricity, read our article explaining this in-depth.

Electricity is measured in kilowatt-hours (kWh). The average household in the United States uses just under 900 kWh of electricity per month, but your usage and the resulting bill will vary depending on factors such as the size of your house and the type and number of electrical appliances you use in your home. For example, if your home uses electric heating, your electricity bill might be higher than someone whose home uses gas heating. Wondering how to read your electricity bill? We break it down for you in this article.

Gas bill

Your gas bill is the monthly cost of supplying, transporting, and delivering natural gas to your home. Included in your gas bill are supply charges and delivery charges. Homeowners' monthly gas bills across the United States vary greatly, depending on whether your home has gas-powered appliances, like hot water heaters and stoves, and if it is heated and cooled using natural gas.

Natural gas is measured in therms, and your bill is calculated by multiplying the current price of natural gas by the number of therms you used over a month. During winter, homeowners may use upwards of 100 therms per month, but in warmer months, that can drop as low as 20 therms. Gas bills can change year to year based on things like shifting fuel prices, weather (and if you need to heat your home more in response to a particularly cold winter, for example), and location. Wondering why your gas bill is so high? We address some of the most likely reasons in this article.

Water bill

Your water bill is the monthly cost of supplying and delivering water to your home. Depending on your location, it also may be referred to as a water and sewer bill. A water bill is the charge for the amount of water you use over a month. Anything in your home that uses running water contributes to the final number you see on your water bill: sink faucets, toilets, showers, dishwashers, hoses, etc. The heating of the water, however, depends on your home’s hot water heater, which is powered by electricity or gas. As a result, the cost of hot water will be included in your electricity bill or gas bill.

Water use is measured in gallons, and the final cost of your water bill will be measured by multiplying the number of gallons you used over a billing period by your water provider’s service rate. Estimates show that the average American uses approximately 3,000 gallons of water monthly, so depending on the number of residents in your household, your water bill will be a factor of that.

Other types of utility bills

In addition to electricity, gas, and water bills, you may have other monthly bills that fall into the utility category. These could include trash/recycling removal, Wi-Fi, streaming services, or cable.

Go solar

Installing a solar system on your roof is a great way to save on your electricity bill. Whether it’s a solar or solar-plus-storage system, your installation will save you money on your monthly utility costs by lowering your electricity bill. If you live in a state with policies like net metering, you’ll enjoy even more savings if your system’s connected to the grid. Interested in what an electricity bill looks like after solar? One of our EnergySage team members wrote about what his bills look like two years after installing solar panels – check it out.

If you’re ready to save on your electricity bill with solar and want to receive quotes from EnergySage-verified solar installers in your area, visit our Marketplace to get started.

Install heat pumps

Hoping to save on heating and cooling costs for your home? Air source heat pumps may be the answer you are looking for. If you’d like to lower your gas bill in the winter and cut down on how much you spend to cool off your home during the summer, a heat pump system is a cost-effective and energy-efficient solution. Heat pumps transfer heat from one place to another instead of creating it like more traditional systems. We explain the basics about air source heat pumps in this article. With a heat pump system, you could save as much as $900 annually in heating costs!

If you’re looking to learn more about air source heat pumps, how much you could potentially save with them, and if they are right for your home, we answer some frequently asked questions about them in this article.

Use solar hot water heaters

A solar hot water heater is another great way to minimize your monthly utility costs. Instead of using gas or electricity to heat the hot water you use in your home, a solar hot water heater uses the sun to heat the hot water you use every day for things like taking a shower, running the dishwasher, or doing a load of laundry. Learn more about the different types of solar hot water heaters that are available with this overview.

Wondering if solar hot water is right for your home? There’s a good chance it is! We discuss a few basic questions you might have to answer first in this article.

How much is the average electricity bill in the United States?

The average electricity bill in the United States was $122 per month in 2021.

Can I replace my gas appliances with electric appliances?

Yes! Learn more about energy efficient electric appliances with our helpful guide.

How can I save on hot water costs?

The best way to save on hot water is to install solar panels or a solar hot water heater. You should also make sure your hot water heater is electric, not gas powered.

What if I can’t pay my utility bill?

There are likely services in your area to support low-income community members and help them pay their bills. Additionally, depending on state regulations, most utilities are required to continue providing services for a certain period, even if you cannot pay.

Think you’re paying too much for your utilities? The best way to lower your bills is to go solar! On the EnergySage Marketplace, you’ll receive custom quotes from local installers, which you can compare to find the best solar system for your home. If you’re a renter or unable to install solar on your property, check out our Community Solar Marketplace – with community solar, you can still expect to save between 5 and 15 percent annually on electric bills.